Fed rate hike is bad news for cybersecurity

One thing for sure about the United States’ Federal Reserve raising interest rates is that there will be a spillover across industries, including a rather hot industry of late: Cybersecurity.

Following the rate hike, other financial markets may follow suit, and so may banks within South-east Asia, as the US rates are a common market benchmark (“S’pore consumers to see loan repayments go up as Fed hikes rates’; Dec 18)

Businesses, especially those that rely on some form of bank loans for survival or are dependent on trade in US dollars, may suffer. Increased interest rates imply a budget reduction for business operations, along with the budget for cybersecurity.

A report released last month showed that businesses and governments in South-east Asia continue to be among the most targeted by cyberattacks compared with their global counterparts. Yet, cybersecurity budgets remain relatively low among companies in the region.

The Singapore Government is even urging private companies to allocate 10 per cent of their information technology budget on cybersecurity.

The imbalance between cyber attacks and defences has made the region a prime target. Now, if the US rate hike causes businesses’ cybersecurity budgets to be cut greatly, South-east Asia’s cybersecurity defences would be inadvertently weakened.